Commissioning and contracting – shaping the ‘new normal’

During the coronavirus crisis, we have seen public bodies, and councils in particular, offering an unprecedented level of flexibility and support to voluntary organisations who deliver contracts. This flexibility allows them to respond to what communities and citizens want and need. Charities have deep connections in communities and are driven to achieve their mission. But the system has at times made it more difficult for the voluntary sector to bring these qualities to public service delivery, and provide support that is personalised, empowering and effective.

Now we should build on the good practice to permanently shift to a better way of working between authorities, voluntary organisations and communities. Flexible, partnership working and an end to price-based competition should be part of the ‘new normal’, but we need your help to make this case.

The current picture

For many organisations income from contracts has been relatively stable compared to other income sources. Relationships with authorities and commissioners have also been improving. However, this experience is not universal, and the current crisis has highlighted serious pre-existing flaws in the system.

Funding

Funding from local and central government and related agencies is an ongoing concern. Councils have lost a third of their revenue over the past 10 years and several have recently announced they are close to effective bankruptcy, while others are selling assets. Across all authorities, enough funding must be provided to make sure that public services can be delivered effectively, particularly where demand is shifting or increasing as a result of the crisis.

Price-based competition

Before the outbreak we saw organisations increasingly refusing or relinquishing contracts because the prices had been pushed too low. This is a result of heavier weighting being given to price during the commissioning process – over quality, outcomes and social value. Some organisations use additional voluntary income to make sure they can deliver safe and good-quality services. Reductions in this income as a result of coronavirus will make it harder for organisations to deliver these contracts and to provide positive outcomes for the communities they work with.

Overly restrictive arrangements

In recent years the effectiveness of, and overreliance on, payment by results to drive performance has come under increasing scrutiny. Since the outbreak some organisations have benefited from greater flexibility on key performance indicators and payment arrangements, as outlined by the procurement guidance from the Cabinet Office. But there is concern that they will be expected to deliver the same outcomes within previous timescales when the commissioner decides it is time to return to previous arrangements. This fails to recognise that many will be dealing with increased demand, reduced capacity and are operating in a changed environment. Many organisations were already dealing with significant complexity before the crisis and will continue to do so into the future.

Transactional relationships

Many organisations have been used to a continuous cycle of retendering and a transactional way of working with commissioning authorities – one that sees procurement as the end goal rather than the means to achieve outcomes. In the current crisis we know of organisations that have had no or limited communication with authorities, or are awaiting decisions on contracting arrangements, leaving them in challenging circumstances and risking the loss of important information on needs and potential responses that organisations can offer.

What change is needed

This crisis has highlighted more than ever the need for support services to work alongside communities, adapting to the needs and wishes of the individual, focusing on their strengths and ensuring their rights and freedoms. Some of this is about building the confidence and capacity of commissioners, but we also need to see the following:

  • A push for ongoing use and stronger implementation of the procurement guidance from the Cabinet Office
  • Strong leadership in authorities to give commissioners and contract managers the support they need to change
  • A review of commissioning procurement, recognising what is possible within our current system
  • Enough local government funding
  • For all public bodies to take social value into account, understanding the inherent social value in the way charities work and deliver
  • Commissioners considering the flexibility and other benefits of using grants more widely, rather than contracts

Help us build the case

We need your help to make the case for why a more flexible approach should remain post-covid-19. We are working in collaboration with other sector bodies including Children England, Clinks, Locality and Lloyds Bank Foundation to set out what the ‘new normal’ should look like for commissioning and contracting.

Use this form to tell us your stories of good and bad commissioning practice since the outbreak. Your experiences will help us highlight the benefits of flexible and collaborative approaches.

If you have any questions please email me – catherine.goodall@ncvo.org.uk

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Catherine Goodall is a senior policy officer at NCVO, working primarily on public services policy. She has a background in research and practice, working with local authorities and universities to drive service improvement and facilitating participatory action research.

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